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  • I believe big institutions

  • have unique potential to create change,

  • and I believe that we as individuals

  • have unique power

  • to influence the direction that those institutions take.

  • Now, these beliefs did not come naturally to me,

  • because trusting big institutions,

  • not really part of my family legacy.

  • My mother escaped North Korea

  • when she was 10 years old.

  • To do so, she had to elude every big institution in her life:

  • repressive governments, occupying armies

  • and even armed border patrols.

  • Later, when she decided she wanted to emigrate to the United States,

  • she had to defy an entire culture

  • that said the girls would never be the best and brightest.

  • Only because her name happens to sound like a boy's

  • was she able to finagle her way into the government immigration exam

  • to come to the United States.

  • Because of her bravery and passion,

  • I've had all the opportunities that she never did,

  • and that has made my story so different.

  • Instead of running away from big institutions,

  • I've actually run toward them.

  • I've had the chance over the course of my career

  • to work for The Wall Street Journal,

  • the White House

  • and now one of the largest financial institutions in the world,

  • where I lead sustainable investing.

  • Now, these institutions are like tankers,

  • and working inside of them,

  • I've come to appreciate what large wakes they can leave,

  • and I've become convinced

  • that the institution of the global capital markets,

  • the nearly 290 trillion dollars of stocks and bonds in the world,

  • that that may be one of our most powerful forces

  • for positive social change at our disposal,

  • if we ask it to be.

  • Now, I know some of you are thinking,

  • global capital markets, positive social change,

  • not usually in the same sentence or even the same paragraph.

  • I think many people think of the capital markets

  • kind of like an ocean.

  • It's a vast, impersonal, uncaring force of nature

  • that is not affected by our wishes or desires.

  • So the best that our little savings accounts

  • or retirement accounts can do

  • is to try to catch some waves in the good cycles

  • and hope that we don't get inundated in the turbulent ones,

  • but certainly our decisions on how to steer our little retirement accounts

  • don't affect the tides,

  • don't change the shape or size or direction of the waves.

  • But why is that?

  • Because actually, one third of this ocean of capital

  • actually belongs to individuals like us,

  • and most of the rest of the capital markets

  • is controlled by the institutions that get their power and authority

  • and their capital from us,

  • as members, participants, beneficiaries, shareholders or citizens.

  • So if we are the ultimate owners of the capital markets,

  • why aren't we able to make our voices heard?

  • Why can't we make some waves?

  • So let me ask you a different question:

  • did any of you buy fair trade coffee

  • the last time you were at a supermarket or at Starbucks?

  • OK. Do any of you go to the restaurant

  • and order the sustainably farmed trout

  • instead of the miso-glazed Chilean sea bass

  • that you really wish you could have?

  • Do any of you drive hybrid cars or even electric cars?

  • So why do we do these things?

  • Right? One electric car doesn't amount to much in a fleet of 1.2 billion

  • combustion engine vehicles.

  • One fish is just one fish in the sea.

  • And one cup of coffee

  • doesn't amount to a hill of beans in this crazy world.

  • But we do these things because we believe they matter,

  • that our actions add up,

  • that our choices might influence others

  • and collectively, what an impact we can have.

  • So, in my bag I have a coffee mug that I bought a couple of years ago.

  • It's a reusable mug. It has all these things printed on it.

  • Look at some of the things that are on it, that it says.

  • "This one cup can be used again and again."

  • "This one cup may inspire others to use one too."

  • "This one cup helps save the planet."

  • I had no idea this plastic cup was so powerful.

  • (Laughter)

  • So why do we think that our choice

  • of a four dollar shade-grown fair trade artisanal cup of coffee

  • in a reusable mug matters,

  • but what we do with 4,000 dollars in our investment account

  • for our IRA doesn't?

  • Why can't we tell the supermarket and the capital markets

  • that we care,

  • that we care about fair labor standards,

  • that we care about sustainable production methods

  • and about healthy communities?

  • Why aren't we voting with our investment dollars,

  • but we would vote with our lattes?

  • So I think it has something to do with the myths,

  • the fables that we all carry around in our collective consciousness.

  • Do you remember the Grimm's fairy tale about the magic porridge pot?

  • If you said to the pot, "Boil, little pot, boil,"

  • it would fill up with sweet porridge.

  • And if you said, "Stop, little pot, stop,"

  • it would stop.

  • But if you got the words wrong, it wouldn't listen,

  • and things could go terribly awry.

  • So I think when it comes to markets,

  • we have a little bit of a similar fable in our heads.

  • We believe that the markets is this magic pot

  • that obeys only one command:

  • make more money.

  • Only those words said exactly that way

  • will make the pot fill up with gold.

  • Add in some extra words like "protect the environment,"

  • the spell might not work.

  • Put in the wrong words like "promote social justice,"

  • and you might see your gold coins shrink

  • or even vanish entirely, according to this fable.

  • So we asked people, what do you really think?

  • And we actually went out and polled a thousand individual investors,

  • and we found something fascinating.

  • Overwhelmingly,

  • people wanted to add those extra words into the formula.

  • 71 percent of people said yes,

  • they were interested in sustainable investing,

  • which we define as taking the best in class investment process

  • that you already have traditionally

  • and adding in the extra information you get

  • when you think about the environment and society and good governance.

  • 71 percent wanted that.

  • 72 percent said that they believe that companies who did that

  • would actually do better financially.

  • So people really do believe that you can do well by doing good.

  • But here was the weird thing:

  • 54 percent of the people

  • still said if they put their money in those kinds of stocks,

  • they thought that they would make less money.

  • So is it true?

  • Do you get less sweet porridge if you invest in shade-grown coffee

  • instead of drinking it?

  • Well, you know, the investors in companies like Burt's Bees

  • or Ben & Jerry's wouldn't say so.

  • Right? Both of those started out as small, socially conscious companies

  • that ended up becoming so popular with consumers

  • that the giants Unilever and Clorox bought them

  • for hundreds of millions of dollars

  • each.

  • But here's the important thing.

  • Those corporations realized

  • that if they wanted to protect the value of their investments,

  • they had to preserve that socially conscious mission.

  • If they didn't keep adding in those extra words

  • of environmentally friendly and socially conscious,

  • those brands wouldn't make more money.

  • But maybe this is just the exception the proves the rule, right?

  • The serious companies that fund our economy

  • and that fund our retirements and that really make the world go round,

  • they need to stick to making more money.

  • So, Harvard Business School actually researched this,

  • and they found something fascinating.

  • If you had invested a dollar 20 years ago

  • in a portfolio of companies

  • that focused narrowly on making more money

  • quarter by quarter,

  • that one dollar

  • would have grown to 14 dollars and 46 cents.

  • That's not bad until you consider

  • that if instead you'd invested that same dollar

  • in a portfolio of companies

  • that focused on growing their business

  • and on the most important environmental and social issues,

  • that one dollar would have grown

  • to 28 dollars and 36 cents.

  • almost twice as much sweet porridge.

  • Now, let's be clear, they didn't make that outperformance

  • by giving away money to seem like a nice corporate citizen.

  • They did it by focusing on the things that matter to their business,

  • like wasting less energy and water

  • in their manufacturing processes;

  • like making sure the CEO contracts had the CEOs incentivized

  • for the long-term results of the company and the communities they served,

  • not just quarterly results;

  • or building a first class culture

  • that would have higher employee loyalty,

  • retention and productivity.

  • Now, Harvard's not alone.

  • Oxford also did a research study where they examined 120 different studies

  • looking at the effect of sustainability and economic results,

  • and they found time and time and time again

  • that the companies that cared about these kinds of important things

  • actually had better operational efficiency,

  • lower cost of capital

  • and better performance in their stock price.

  • And then there's Al Gore.

  • So 20 years ago, when I worked for Al Gore in the White House,

  • he was one of the early pioneers pleading with businesses and governments

  • to pay attention to the challenges of climate change.

  • Post-White House, he opened an investment firm called Generation,

  • where he baked environmental sustainability and other things

  • right into the core investment process.

  • And at the time there was a good bit of skepticism about his views.

  • Ten years later, his track record is one more proof point

  • that sustainable investing done right can be sound investing.

  • Far from making less sweet porridge

  • because he added sustainability into the mix,

  • he actually significantly outperformed the benchmark.

  • Now, sustainable investing,

  • the good news is it doesn't require a magic spell

  • and it doesn't require some investment secret,

  • and it's not just for the elite.

  • It is not just about private equity for billionaires.

  • It's not just groovy-sounding investments like clean technology

  • or microfinance in emerging markets

  • or artisanal bakeries in Brooklyn.

  • It's about stocks and bonds and Fortune 500 companies.

  • It's about mutual funds.

  • It's about all the things

  • we already see in the market today.

  • So here's why I'm convinced

  • that we collectively have the power

  • to make sustainable investing the new normal.

  • First, the proof points are coming out all the time

  • that sustainable investing done right,

  • preserving all the same good principles of investing,

  • the traditional sphere, can pay.

  • It makes sense.

  • Secondly,

  • the biggest obstacle standing in our way

  • may actually just be in our heads.

  • We just need to let go of that myth

  • that if you add your values into your investment thinking,

  • that you get less sweet porridge.

  • And once you get rid of the fable,

  • you can actually start appreciating those facts we've been talking about.

  • And third, the future is already here.

  • Sustainable investment today is a 20 trillion dollar market

  • and it's the fastest-growing segment of the investment industry.

  • In the United States, it has grown enormously, as you can see.

  • It now represents one out of every six dollars

  • under professional management in the United States.

  • So what are we waiting for?

  • For me, it goes back to the inspiration that I received from my mother.

  • She knew that she wanted a life

  • where she would have the freedom to make her own choices

  • and to have her voice heard and write her own story.

  • She was passionate about that goal

  • and she was clear that she would let no army, no obstacle,

  • no big institution stand in her way.

  • She made it to the States,

  • and she became a teacher,

  • an award-winning author

  • and a mother,